Banking

Inside the rise of Ryan Tolkin, the 34-year-old investing mastermind behind Schonfeld’s transformation from family office to 600-employee hedge fund heavyweight

  • Ryan Tolkin transformed Schonfeld from a family office to an $8.8 billion hedge-fund heavyweight.
  • The 34-year-old Duke grad has been driven to lead his entire life, friends and colleagues said.
  • Insider spoke with those who know him best to understand how he got here and what comes next.

In high school, Ryan Tolkin was trading securities at a billionaire’s family office. In college, he was presenting his volatility research to a global asset manager. Now, at 34, the Long Island native is running the $8.8 billion hedge fund Schonfeld Strategic Advisors as its chief executive and chief investment officer.

How he got to his lofty perch is a combination of natural ability and extreme focus and discipline, said those who know him best. Professors described him as both intelligent and prepared, while fraternity brothers remember a driven friend who wouldn’t let anything get in the way of his ultimate goals.

Schonfeld has grown into one of the industry’s more prominent multi-managers thanks to years of solid performance, fundraising, and aggressive hiring. The firm’s flagship fund, which runs more than $4 billion in capital, has an average annual return of more than 14% in the five full years it has been open to outside capital, an investor letter showed.

Tolkin is known for being plugged-in but not overbearing — someone portfolio managers and analysts can approach without feeling intimidated.

Now, after being appointed CEO at the beginning of the year and launching a new macro division more recently, Tolkin is riding as high as ever.

And Tolkin isn’t shy about his drive. In 2018, the Duke grad told Insider that his goal for the firm was “to be the premier equities hedge fund globally.” 

Most people “would certainly” describe him as ambitious, he recently told Insider. 

“Part of being ambitious is learning — learning from the best and what they’ve done, both their failures and their successes,” he said.

A Series 7 test in between biology class and homecoming 

Tolkin’s first full-time job out of college was at Goldman Sachs, but he said, “Schonfeld was the first real job I ever had.”

The billionaire Steven Schonfeld, who made his fortune leading an army of traders for decades, had his family office headquartered in the Long Island hamlet of Jericho, near where Tolkin grew up. His father, Bradley Tolkin, has run the travel agency World Travel Holdings for decades, which is how Schonfeld initially met the Tolkin family.

Ryan Tolkin described himself as a kid who was interested in math and finance, and he said his first exposure to investing was a stock-picking game put on by Newsday.

“I was the person growing up who knew, for all my favorite sports teams, the ERAs of all the pitchers and all the stats,” he said, referring to the figure used to measure how many runs a pitcher would give up in a nine-inning game.

As part of a work-study program toward the end of high school, Tolkin interned at Schonfelds multibillion-dollar family office, even taking a Series 7 — a licensing exam necessary to buy and sell a number of securitiesso he could trade money for the firm as a teenager.

“I think he saw in me someone very similar to him,” he said about Schonfeld, adding that the billionaire wanted Tolkin to return to the family office after college.

The big-name connection didn’t go to Tolkin’s head when he moved from Long Island, New York, to Duke University in Durham, North Carolina.

“One of the smartest students I ever taught, but he also prioritized coursework,” said Emma Rasiel, a professor at Duke who was Tolkin’s advisor for his thesis.

His hard work on his thesis even got the attention of a Duke alum from Lazard Asset Management, Rasiel said. Tolkin and Michael Sloyer, who went on to be a managing director for Goldman Sachs in Japan, coauthored a thesis on the VIX as a portfolio diversifier, something Lazard was thinking about at the time, Rasiel said.

She invited the alum to listen to Tolkin and Sloyer present their work, and the conversation continued into a long dinner, she said.

“It was never enough to just have the right answer. He wanted to know how he got the right answer and in what circumstances would it not be the right answer,” Rasiel said.

While his college roommate Phil Haus described the pair’s fraternity, Sigma Nu, as “work hard, play hard,” he said “Ryan always was laser-focused on what he wanted to do” and didn’t take anything for granted.

“He literally said on several occasions that he was going to be running a hedge fund in his early 30s, and wanted to work to get there,” Haus said.

Lessons from crises

Though Schonfeld hoped Tolkin would return to his firm after graduating, Tolkin chose to join Goldman Sachs in a capital-structure-arbitrage role in hopes of expanding his markets knowledge and network.

But he joined in the summer of 2008, and he was soon moved to the credit-trading team as the firm navigated the financial crisis that bankrupted peers such as Lehman Brothers.

The housing and banking crisis of 2008 was the introduction to finance for many current leaders, shaping a generation of investors and executives. For Tolkin, the consequences of poor risk management were no longer theoretical.

“One of the things that we’ve done best is that we have evolved as the markets have,” he said. One of his many responsibilities in his dual CEO-CIO role at Schonfeld is running a quantitative risk overlay book with a 10-person team that can quickly take advantage of market events such as the trading around GameStop and the Archegos meltdown.

He added: “It’s not a ‘best ideas’ portfolio like you’d see at other multi-managers. I share a lot of vision, input, and ideas with the team” — who are mainly quants and who research the different theses.

His ideas come from reading everything — from news reports to novels — and from his conversations with the more than 90 portfolio managers he’s working with. Examples of questions include “What do flows look like? Where are the crowded areas in the market?” he said.

“It’s a book we use to manage risk across the portfolio,” Tolkin said.

When the pandemic shut down the global economy last spring, Schonfeld, like many equity-focused funds, took a hit. But the firm rallied, finishing the year up 9.4% in its flagship fund. This year, through June, the flagship was up 8.8%, a source close to the firm said.

“We have a saying we like to use here: Prior planning prevents poor performance,” Tolkin said.

“The goal at Schonfeld is always self-improvement,” he added.

From 37 to 600

In 2013, Tolkin returned to Schonfeld after five years at Goldman. He was the 37th employee at the billionaire’s family office. Tolkin came in as the CIO, a lofty title for someone who was still years away from celebrating his 30th birthday.

And he didn’t come to idly protect his boss’ immense wealth. He saw an opportunity to grow into a serious player in finance, and he took it.

“Steven’s level of trust to really transform the firm was huge,” said Phil Han, a Goldman Sachs partner who works closely with Tolkin in his role as a prime broker to the fund.

Tolkin, along with Schonfeld and Andrew Fishman, the firm’s president, decided to open the firm up to outside capital in 2015.

“I thought about where I wanted, with the backing of Steven, to take the business,” Tolkin said. 

“If we were going to fulfill our vision of building a robust and competitive business, we were going to need some supplemental capital at some point in time,” he continued.

They built out an internal long-short platform, and then international teams, partially through the 2018 acquisition of Folger Hill, which gave Schonfeld a strong presence in Asia. They added to their existing quant abilities throughout.

Now, the manager that didn’t have any support staff in 2013 to help the new CIO set up his computer boasts more than 600 employees. A recent presentation on its portfolio managers showed offices across the US, Europe, and Asia.

“We say constantly that our talent is our strategy, and it was our strategy back then, too. The notion that I needed to surround myself with the right talent is the DNA of Schonfeld,” Tolkin said. These investors come from big-name shops such as Citadel, Millennium, and Point72.

The most recent expansion is a foray into the macro and fixed-income space for the first time. Schonfeld persuaded Colin Lancaster, a former Citadel and Balyasny executive, to lead the space, and he has plans to hire people in the US and London to build out his team.

“I was incredibly impressed by his energy and his vision,” Lancaster said of Tolkin.

“You have this leader who is deeply invested in and knowledgeable about all parts of the business. I think that is differentiated from what others have to offer,” he added.

Han said Tolkin was easily one of the youngest people in his role at a major platform hedge fund, which “brings a different perspective to things. It’s refreshing.”

The firm is also taking steps to keep the talent pipeline flowing. Last September, it launched its Sapphire training program for analysts looking to move up the ladder.

The ambitious family man

Tolkin’s achievements thus far have been impressive and led to some big-time personal purchases, including the $14 million, seven-bedroom Miami Beach mansion that he and his wife, Jefferies managing director Ariella Tolkin, bought earlier this year. (The 7,700-square-foot house on Biscayne Bay pales in comparison to the $111 million Palm Beach estate that Schonfeld himself bought in 2019.)

But business success isn’t the be-all and end-all for Tolkin, the oldest of three brothers. Haus, his college roommate, called him the “quintessential big brother — the serious archetype.”

“I think he got a lot of that from his dad,” Haus said. He added that one of Tolkin’s younger brothers, Sean, basically lived on their couch during junior year. At one point, all three Tolkin brothers — Ryan, Sean, and Conor — were at Duke. Sean is now a director at their father’s travel agency, while Conor — who married Kara Dimon, a daughter of JPMorgan CEO Jamie Dimon — was poached by Wells Fargo last year from BNY Mellon.

“Family is so important to all of them,” Haus said.

Lancaster, the new macro head, said Ryan Tolkin has embodied the supportive culture of Schonfeld that the firm preaches. After a vacation in early July, Tolkin sent around an email to senior staff thanking them for letting him take time off and encouraging them to take time to be with their families as well. Included in the email was a picture of his family, Lancaster said. 

“In this business, you’re always wary of a surprise, of a firm overpromising,” Lancaster said. “I was really impressed with the lack of surprises here.”

Lancaster’s own due diligence uncovered the low turnover rate among portfolio managers at the firm. He said, “I hand that to Ryan, because I think all culture things are ultimately linked to the top.” Since Tolkin started, only two portfolio managers have left the firm of their own accord, a source familiar with the firm said.

Goldman’s Han has watched the firm grow from accepting outside capital to the $8.8 billion firm it is now, and he’s impressed with how consistent the culture and communication have been. Tolkin himself is still often involved with day-to-day discussions with Goldman — anything from capital raising to a complex, new structuring for a particular portfolio.

“It draws you in. You feel more connected to them, like you have a stake in the business they are building,” Han said.

And Tolkin plans to keep building, though the next step will be a group effort, he said. 

“We are always opportunistic and open-minded to exploring new, orthogonal opportunities,” he said.

Tolkin added, “I’m open-minded and encourage the team to bring me new ideas.”

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